China small business owners expand fee protest to Alipay

Reuters News
Posted: Oct 24, 2011 2:08 AM

BEIJING (Reuters) - A group of small-business owners in China has expanded a protest against higher fees to target Alipay, the country's leading online payment platform, after its corporate sibling, Taobao Mall, announced a tenfold fee hike for some businesses using its service, Chinese media reported on Monday.

Alibaba Group owns both Alipay and Taobao Mall, which announced on October 10 that it would raise the annual fee for business owners to the maximum of 60,000 yuan ($9,400) in 2012 from 6,000 yuan ($940) and raise required deposits to 150,000 yuan from 10,000 yuan.

That triggered a wave of online protests from small-business owners and their supporters, Chinese media reported.

Three days later, Alibaba Group said it would invest 1.8 billion yuan to aid the development of small-to-medium sized enterprises on Taobao Mall, although the details of that plan remain unclear.

Alibaba Group, which also owns Taobao, Etao and Hong Kong-listed, is about 40 percent-owned by Yahoo Inc.

The Chinese government has called for the establishment of new rules to govern the country's booming e-commerce sector.

Still unsatisfied, a group of merchants organized last Friday to simultaneously withdraw money from their Alipay accounts, according to China's Southern Metropolis Daily.

The report did not say how many businesses participated in the protest, but Alipay confirmed the move on its official microblog.

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An Alipay spokesperson said the company had not been affected by the "malicious action" in what the Global Times newspaper described as "large-scale simultaneous withdrawals" of money from their accounts.

Taobao Mall had 32.8 percent of China's 54.2 billion yuan in the business-to-consumer online marketplace in the second quarter, according to data from Analysys International. Taobao Mall's nearest rival, 360buy, had 12.4 percent of the market.

($1 = 6.384 Chinese yuan)

(Reporting by Sabrina Mao and Ken Wills; Editing by Matt Driskill)